SAFTU is shocked by the extent of the GDP crash

8 September 2020

The South African Federation of Trade Unions (SAFTU) expected a massive decline of the Gross Domestic Product in the second quarter of the 2020, following a lockdown that put most of the productive sectors of the economy on standstill. However, that the decline reached an historically-unprecedented 51% annualised (16% for the quarter) has shocked us.

SAFTU is extremely worried that a sector we have always believed should be an engine of growth, the manufacturing sector, has declined by a massive 74,9% and that has contributed to a decline of 10,8% to the GDP. As if this was not enough, the trade, catering and accommodation industry decreased by 67,6% and that contributed -10,5% points to the overall GDP decline. The transport, storage and communication industry decreased by 67,9% and contributed -6,6 percentage points, thanks especially to the airline industry’s grounding.

Only the agriculture, forestry and fishing industry grew by 15% which is excellent news, for which we can thank the recovery from drought in many parts of the country.

SAFTU unions - in particular, in the manufacturing sector – had warned that the impact of the COVID-19 lockdown on the economy was going to massive. This was based on the reality that our organisers’ jobs have been transformed into mere managers of the flood of Section 189 notices.

But as hard as the lockdown hit our entire economy, and as weak as the Unemployment Insurance Fund and Temporary Employer-Employee Relief Scheme proved to be, and as desperate the poverty and even starvation in the society has now become (with a doubling from typical rates of 25% to lockdown rates of nearly 50%), we are still convinced we must use this crisis to benefit South Africa, and not allow our industries to be killed by it.

SAFTU insists that a crisis that workers did not create must not be solved on the back of workers. The truth is, before the COVID-19 pandemic lockdown, South African capitalism was in a recession. Now it appears we are in a depression, in which a 10% annual loss of GDP will be recorded.

But before the massive wave of retrenchments and job losses in the second quarter, there was a jobs loss blood bath, with the rate of genuine joblessness at almost 40% when we include those who have simply given up looking.

Our economy has faced a structural capitalist crisis which we inherited from the colonial and apartheid era. The government has, for 26 years, refused to put to an end to the neo-colonial economy and to restructure it in a way that meets the basic needs of workers, with jobs that pay a living wage, plus respect and due reward for those who contribute to our ‘social reproduction,’ especially women who bear the brunt of child-rearing, cooking, cleaning and elder-care. With the Covid-19 lockdown having hit us with such devastation, as StatsSA reminds, this role played by women must now be acknowledged.

Let us again request from StatsSA that the category of GDP be amended. Currently it has no ‘value’ attributed to that hard work by women, in social reproduction and community organising, even though this is so vital to the ability of our society to survive, and mutual aid systems to kick in where the state has so often failed us. StatsSA is idiotic in not taking the opportunity to acknowledge work by women, when releasing the GDP stats, because like nature’s contribution to the economy (non-renewable resource depletion), like wear-and-tear on machinery, and like pollution – none of which GDP includes – this measure is utterly blind.

It is time for StatsSA to end its neoliberal, neo-colonial reliance upon the Western tradition of using GDP as the foundational mode of economic accounting, and also take into consideration all the factors in our society that produce value but because it is not marketised, was not considered by (white male) economists to merit inclusion in GDP.

At no time in our history was this critical role of women, mutual aid, community organising and social reproduction more obvious than during the Covid-19 lockdown, and it is shameful that not even a StatsSA footnote reflects this gaping hole of a nonsense termed Gross Domestic Product.

Why are we so intent on expanding our sense of what should be done to rebuild our society, on the strengths of women, communities, the environment and social reproduction? As a result of the government’s refusal to address the economic crisis in a manner consistent with the mandate it received in 1994, the working class has suffered immensely. We have at least 10.8 million unemployed, and poverty well above 67% (counted at R50/day and below, the ‘Upper Bound Poverty Line’).  

It is more clear than any time in the past, that if the working class does not stand up, unite and fight back, it will continue to be the worst victims of worsening poverty, unemployment and inequality.

At the SAFTU NEC meeting held on the 25 – 27 August 2020, we agreed on the need to go back to the streets and mobilise the entire working class behind a set of demands centered around the need for the restructuring of the economy to address the needs of the working class.

Issued by Zwelinzima Vavi, SAFTU General Secretary, 8 September 2020